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Almost no one pays a 6% real-estate commission except Americans

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Re: Almost no one pays a 6% real-estate commission except Americans

#281

Post by rconti »

ineptech wrote: post #217
ssharp wrote: post #21

I don't know how much value agents added over the past few years, navigating bidding wars, pocket listing access, etc. but I've never understood the justification for spending so much money on these fees. The last time I sold a house was 2011, when the housing market was still down from the 2008/09 crash. I talked with multiple agents and never got a sense of them doing much to push the house other than listing it on…

For the buyer, the value is clear: someone to go out with you to house after house, let you in, walk around with you, talk about whether you could fit a king-sized bed in that room, etc. It's a lot of work and the buyer gets a lot of value from it. But for the seller, who pays the tab, the only value is that some buyers' agents will steer their clients away from you unless you offer a large commission. The individual…

Our agent presumably got $23k for finding our house. But actually, she didn't find our house, we found it. (to be fair, it was outside of our self-avowed search criteria because we had to settle on a 3/1 when we wanted a 3/2).

But I suppose she got an easy sale. I'm not sure if she actually showed us any houses in person, or just showed us listings. She definitely had to spend a lot of time helping us sign the 150-or-whatever pages of the offer letter, going back and forth with the seller, etc.

But still, it was probably 5 hours of 'visible' work, so I'll be generous and say 20 hours total invested.

Had we spent 6 months showing us houses, she'd have invested a lot more. And, of course, not gotten a dime more out of us. So, you win some, you lose some.

Re: Almost no one pays a 6% real-estate commission except Americans

#282

Post by Spooky23 »

ssharp wrote: post #21

I don't know how much value agents added over the past few years, navigating bidding wars, pocket listing access, etc. but I've never understood the justification for spending so much money on these fees. The last time I sold a house was 2011, when the housing market was still down from the 2008/09 crash. I talked with multiple agents and never got a sense of them doing much to push the house other than listing it on…

Like any sales profession, the median salesperson is a moron. Many of the listing agents just try to sign as many as possible to get the shared commission. They’re easy to find because theirs is a volume game and they market heavily.

If you don’t ask for what you want or know what you want, you get those guys. If you do, you pay for the big leagues. You’re not going to find their business card at the coffee shop bulletin board or church bulletin.

When I sold my first house, I paid the full commission plus 50% of anything over ask if it closed within 45 days of signing.

This lady was a beast. She hung out at divorcee support groups and had a file of recently divorced women with cash settlements. All-cash offer, well over list, accepted the day before listing with no contingency; closed 10 days later.

Did I feel like a horrible person? Yes. Was the place sold to my needs? Yes.

Re: Almost no one pays a 6% real-estate commission except Americans

#283

Post by bbarn »

ineptech wrote: post #217
ssharp wrote: post #21

I don't know how much value agents added over the past few years, navigating bidding wars, pocket listing access, etc. but I've never understood the justification for spending so much money on these fees. The last time I sold a house was 2011, when the housing market was still down from the 2008/09 crash. I talked with multiple agents and never got a sense of them doing much to push the house other than listing it on…

For the buyer, the value is clear: someone to go out with you to house after house, let you in, walk around with you, talk about whether you could fit a king-sized bed in that room, etc. It's a lot of work and the buyer gets a lot of value from it. But for the seller, who pays the tab, the only value is that some buyers' agents will steer their clients away from you unless you offer a large commission. The individual…

I have gotten a lot of value from the two I've used as a buyer, and also the one I used as a seller.

On the buyer side, once we'd toured a few houses and they understood better what we wanted, the number of "No, not a chance" houses dropped to almost zero. Also, when we were just "tire-kicking" and said we had no intent to buy for a year or more, our realtor flat out told us she enjoys seeing new houses and even if we aren't ready it's good leg-work and research for her to do for other clients anyway. Once we found one she was excellent at getting us to the right people for financing, inspections, etc. - in a very small local market. She was also incredibly helpful when we were trying to find a temporary rental from across the ocean remotely, which is what led us to ask her to help find a house to buy eventually.

On the seller side, we left the country, and my realtor sold our house at an amount that covered his commission and then some with almost no effort from us at all. He had the place cleaned, staged, and photographed as part of his fee, and sold it in a day.

Yes, I'm sure like any occupation there are people bad at their job and just collecting cash for doing damn near nothing, but if you find a good one on either side, they can add a lot. Look for referrals from people who've had good experiences, and don't just pick a name from the phone book.

Re: Almost no one pays a 6% real-estate commission except Americans

#284

Post by tverbeure »

kube-system wrote: post #263
tverbeure wrote: post #246

Earlier quoted context omitted.

Whenever we’ve bought a house, we told the agent to not bother sending us listings or set up viewings. We simply checked open houses on Redfin and Zillow ourselves, and if we liked a house, we’d ask the agent to prepare an offer, at a price we set. It is not to figure out what a house will sell for if there are enough other sales in that neighborhood. For their reduced work, we’d ask a reduction of their commission.

In the US, this will severely limit your options. Most houses are posted to MLS first, and don't make it to public sites until later. If you want to get the best deals, you gotta have an agent send you MLS listings daily, swoop in and make an offer on the first day before anyone else sees it. When I bought my last house, my agent was able to send me dozens of listings from MLS for homes that weren't listed on public…

That was not our experience in California.

One of our agents would still send MLS postings to us. We usually got that email after we’d gotten the same email listing from Redfin. And not once was there an MLS listing that wasn’t listed on Redfin.

Re: Almost no one pays a 6% real-estate commission except Americans

#285

Post by [deleted] »

foobarian wrote: post #98
ssharp wrote: post #21

I don't know how much value agents added over the past few years, navigating bidding wars, pocket listing access, etc. but I've never understood the justification for spending so much money on these fees. The last time I sold a house was 2011, when the housing market was still down from the 2008/09 crash. I talked with multiple agents and never got a sense of them doing much to push the house other than listing it on…

> I don't know how much value agents added over the past few years, navigating bidding wars, pocket listing access, etc. but I've never understood the justification for spending so much money on these fees. The question that this raises is even more puzzling: why hasn't there arisen agents that undercut the status quo? Are there guild or cartel effects at play?

[deleted]

Re: Almost no one pays a 6% real-estate commission except Americans

#286

Post by thatfrenchguy »

thiago_fm wrote: post #44

Wrong. In Germany the Maklerprovision (comission for the Real State agent) is 7%. Typically, the seller pays half of it, but there are cases where the buyer pays it all. You also need to pay a notary, government taxes, making the cost of buying a property over 12%+. Furthermore, you shouldn't sell that property for around 10 years, otherwise, you'll need to pay Capital gains taxes. The good part is that you don't pay…

Around 8% total fees in France as well. Property taxes are next to nothing as well compared to the US.

Re: Almost no one pays a 6% real-estate commission except Americans

#287

Post by [deleted] »

no_wizard wrote: post #107
foobarian wrote: post #98

Earlier quoted context omitted.

> I don't know how much value agents added over the past few years, navigating bidding wars, pocket listing access, etc. but I've never understood the justification for spending so much money on these fees. The question that this raises is even more puzzling: why hasn't there arisen agents that undercut the status quo? Are there guild or cartel effects at play?

This was the Redfin model and it had mixed results, I think they thought their non commissioned agents would upend the market, but that didn't really happen. The staying power of the Realtor Association may have something to do with it as well

[deleted]

Re: Almost no one pays a 6% real-estate commission except Americans

#288

Post by mariojv »

tecleandor wrote: post #63
hef19898 wrote: post #27

Earlier quoted context omitted.

You cannot be elected? In all seriousness, notaries in Germany are all full lawyers and practices are highly sought after, as the numbers of lisvensed notaries is limited.

In Spain, Notaries and Property Registrars are a weird thing. You have to pass an exam, same as a public servant, and the number of positions is limited. But you don't have a regular salary like any other public servant: you set up a private office and get the money directly from your clients. The price for the actions is regulated but it's high, and the number of licenses is limited, so generally they have hefty sal…

My eyes popped at that salary for a notary in Spain given most eng positions seem to pay under 60K euro.

It looks like they need a law degree, too, so I'm sure they offer legal services other than property transactions?

https://www.notariado.org/portal/en/how-to-be-a-notary

Re: Almost no one pays a 6% real-estate commission except Americans

#289

Post by mNovak »

I thought for sure realtors would get the gig-economy treatment during the rise of Uber and AirBnb; just a person to handle showings while the mega-corp drops prices slightly and collects huge profits. Not sure if I'm happy or sad that they persist.

But to me the craziest part of it, is that in my experience 90% of people don't comparison shop for a realtor, they just go with that person their friend used. Those social referrals are the vast majority of realtors' deal flow. Consider also that when realtors' make referrals among themselves, the receiving agent will typical give a 30% commission split back to the referrer. So what I'm getting at is, there's basically $10k+ value decisions being thrown around essentially at random, and without any metrics or qualifications.

Re: Almost no one pays a 6% real-estate commission except Americans

#290

Post by lotsofpulp »

no_wizard wrote: post #279
lotsofpulp wrote: post #251

Earlier quoted context omitted.

Websites have obviated the utility of a buyer’s agent “finding” houses for 90% of buyers. Setup alerts for the type of house you want, draw the geographic boundaries on Zillow, and spend 2 minutes looking at the listing and maps to find out everything an agent would have been able to tell you.

I have routinely found more homes by looking around the neighborhoods I wanted to buy in than what I found on Zillow. They don't seem to capture all data sources well (or something else may be afoot, I'm not sure)

I presume their data source is MLS. Perhaps the homes you are finding are not listed in MLS?
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